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"Automattic is still a startup — I’m sure there are deep-pocketed private equity firms that could have outbid us, but the most likely outcome then would have be
by pixelmonkey 7y ago
"Automattic is still a startup — I’m sure there are deep-pocketed private equity firms that could have outbid us, but the most likely outcome then would have been an “asset” getting chopped up and sold for parts. [...] Instead, Tumblr has a new chance to redefine itself in 2019 and beyond."
I think Matt is right to point out the real story here. Automattic is simply the right home for Tumblr. Perhaps similarly to how SmugMug is the right home for Flickr.
Automattic is a company with a commitment to the open web and to effortless digital publishing. That was Tumblr's original vision, too, before it got lost in in the Yahoo/Oath/Verizon behemoth.
Automattic is a company with a long-term vision for what the open web means and how to monetize it so that valuable services can simplify lives for site operators, at scale. Just think of how many blogs and sites (and businesses) Automattic has enabled via WordPress.com, WooCommerce, etc. They can apply that same know-how to Tumblr's community, no matter how neglected it might have been in the Verizon era.
Verizon probably had no clue what to do with Tumblr as an asset, and I am sure they considered doing an orderly wind-down to focus on their core. This was a much classier alternative.
As Matt mentioned, Verizon does $130B in annual revenue. Tumblr was probably a strange distraction for them and had no chance of moving their KPIs as a business.
Automattic's acquisition of it was probably the best possible outcome, for Tumblr's technical & management team, for Tumblr's community, and, most importantly, for its future potential impact on site operators and independent web publishers everywhere.
- chubot 7y agoI feel like the smart thing for Verizon to do is to sell it to Automattic but maintain some equity. Does anyone know if they did that? They're smart enough to do know that they won't be able to develop it under their own management. But having some presumably better managers develop it and maintaining a stake is probably more profitable than simply selling it off to the highest bidder. And definitely more profitable than selling it "for parts", or closing it down.
- munchbunny 7y ago100% agree that of the list of realistic outcomes, Tumblr going to Automattic is one of the best possible outcomes. That said, and I know this is said a lot, but I really wish our industry would stop trying to label everything a "startup". Automattic was founded in 2005 and has 1000 employees. It's not a startup, it's a mature medium size tech company. Its problems are not startup problems, they're mature medium size tech company problems. Automattic isn't even a clear underdog considering the dominance of WordPress. To be clear, that's not a pejorative: Automattic kicked ass, and Automattic deserves its current success. But the phrasing is a sticking point for me in how people talk about tech companies because it ends up feeding into how we perceive working at these companies. When I was job searching, I saw job postings regularly where "startup" or "like a startup" are used to invoke a cultural image for companies that are already post-growth-stage.
- genmon 7y agoThe diff is that Automattic hasn't yet returned money to its investors -- so it's a startup by that definition.
- chiefalchemist 7y agoI'm not familiar with that definition. Can you elaborate and/or provide a couple links? tia
- Ididntdothis 7y agoI hate the startup talk too. After a few years you are no startup anymore. Maybe you are a successful or a struggling business but not a startup. In my company managers think „startup” means to work a lot of overtime and weekends and changing project direction every month.
- abfan1127 7y agoI think its a Growth-Mindset company rather than Dividend-Focused mindset... I agree that its not a startup any more.
- compiler-guy 7y agoA better term for a successful company long past the startup stage but not having exited via liquidity event is "privately held". In a privately held company, the investors can manage it as they see fit. They can take profits if they like, or sell their stakes, just not on public markets.
- samnwa 7y agoThis is really just shorthand for saying "our employees don't hate working at our company as much as the typical large company because we try to limit bureaucracy and politicking and we value / recognize good ideas and actual execution"
- munchbunny 7y agoYeah... I'd agree more if that were actually true. In my experience it actually says "we like to think that we limit bureaucracy and politicking." Whether they actually do, you won't be able to tell. This aspect of language is all signalling but very little actual signal. It's unfortunate.